iPopped, Media C-Suite Strategies, by Richard D. Smith, CEO, SMITH-TRG

iPopped
Copyright 2010 SMITH-TRG, All rights reserved.

Digital-Media

C-Suite Strategies
Players push for relevance in a Googleopoly & iPopped
boardroom ‘Get Real or Go Home’ environment.
By: Richard D. Smith, President, SMITH-TRG
October 9, 2010 SMITH-TRG

October 2010

An iPopped Series Presentation
This is a collateral presentation piece provided to Telecom, Media
and Technology client personnel for reading, not presenting.

Presentation excludes SMITH-TRG and client
proprietary or confidential information.

SMITH-TRG

October 2010

contents

 ENVIRONMENT. . .

 MEDIA LANDSCAPE

 MARKET POSITIONING

 OPPORTUNITY TROUGH

 EVOLVING MARKETS

SMITH-TRG

October 2010

Media’s

Value-Chain
From content creation
to distribution & deliver
of media to the mind

SMITH-TRG

October 2010

ENVIRONMENT . . .

Get Real or
Go Home
(media’s new boardroom mantra)

SMITH-TRG

October 2010

iPopped TM

the Paradigm Shift – led/driven by Steve Jobs as
change agent with iPhone (Smartphones) and iPad (tablets)
as catalysts for digital-media & enterprise transformation.

SMITH-TRG

October 2010

Impacted?
anyone, small to large, U.S. or foreign, in and/or
around digital-media eco-system markets!

SMITH-TRG

October 2010

Accelerated
media sector fragmentation -
up & down the value-chain

SMITH-TRG

October 2010

Time to go ahead make the

TOUGH
DECISIONS
SMITH-TRG

October 2010

MEDIA LANDSCAPE

QUEST FOR MARKET RELEVANCE

SMITH-TRG

October 2010

HULU

Hulu CEO to Big Media:
‘Serve Consumers or Lose Them’

. Big media can't obsess over
protecting the business models
that originally paid for their "Content is discretionary, so you
gleaming corporate offices, Hulu better focus on convenience.”
CEO Jason Kilar told an audience
of publishers during the American
Magazine Conference in Chicago.

SMITH-TRG

October 2010

HOLLYWOOD STUDIOS

Summer movie attendance fell
to 552 million the lowest level
since 1997, while soaring ticket
prices produced record revenue for
studios and theater owners.

Domestic receipts should come in
at about $4.35 billion – $100 Billionaire investor Carl Icahn bought a
million more than the record set significant chunk of Metro-Goldwyn-Mayer
last year. Inc.'s debt and is pushing the beleaguered
film studio to merge with rival Lions Gate
Entertainment Corp.
SMITH-TRG

October 2010

BLOCKBUSTER

(now in Chapter 11)

Retreating to select number of
locations while focusing more on
digital distribution.

Shuttering 1,500 + stores. Shares
delisted and trade for pennies on Mr. Icahn bought roughly a third of
over-the-counter Pink Sheets. Blockbuster Inc.'s debt just before the
movie-rental chain filed for bankruptcy.

SMITH-TRG

October 2010

MOTOROLA

Mr. Jha said he's eager to get into the
tablet business, but is thinking more
broadly about new forms of mobile
Motorola’s tablet to miss the holiday’s. computing, hinting that he is interested
. Mr. Jha is trying to turn around Motorola's in models that are "even more
troubled cellphone business by refocusing smartphone-centric.―
it on Smartphones powered by Google’s
Android operating system. Activist billionaire Carl Icahn continues
to plow money (additional $111 million)
Google has made clear it doesn't think the into Motorola as the company prepares
latest version of Android, called Froyo, is to split off its mobile-phone and set-top
appropriate for tablet devices. box unit into a new company.

SMITH-TRG

October 2010

NOKIA

Nokia misread the way the industry
was merging with computing and
While still the world’s largest social networking. They clung to
mobile maker by volume the the idea that handsets were mainly
. company's brand, once cool, is for phoning people.
battered.
Since Apple introduced its iPhone
On September 10, 2010 Nokia in January 2007 Nokia shares
hired Stephen Elop, the head of have fallen 47 per cent.
Microsoft's business unit, as CEO
to turn the company around.

SMITH-TRG

October 2010

Rapid
Decline
In U.S.
Notebook
Retail
Sales

SMITH-TRG

October 2010

DELL

Dell’s consumer-PC business lost $4
million over past six months.

. In Transformation.
From PC maker to technology solutions
competing against IBM & H-P. Dell launched tablet, ‘Streak’, & 3.5
inch touch-screen phone, ‘Aero’,
based on Android operating system.

SMITH-TRG

October 2010

AOL

February 2010: AOL sells digital ad firm
Second quarter 2010, AOL's revenue Buy.at to Digital Window for $17 million,
plunged 26%, and subscription and after buying it for $125 million in 2008.
advertising revenue each fell 27%.
. June 2010: AOL sells social networking
site Bebo for small fraction of the $850
New Vision – Source of Content million it paid in 2008.

Stock is about flat since its first day of September 2010: Acquires tech website
trading following its separation from TechCrunch for about $30 million and
Time Warner December 2009. 5min Media, which syndicates how-to
videos, for around $65 million.

SMITH-TRG

October 2010

SPRINT & CLEARWIRE

Frustrations over the pace of the 4
G network rollout and Clearwire's
expanding role as a retail wireless
. provider competing with Sprint
have strained the relationship. Daniel R. Hesse, Sprint's chief executive,
Keith O. Cowan, president of strategy and
Sprint owns 54% of Clearwire. corporate initiatives, and Steven L. Elfman,
Clearwire needs billions of dollars to president of network operations and
finish building its wireless network. wholesale, reluctantly agreed to leave the
board, after Clearwire raised concerns
about recent developments in antitrust law.
SMITH-TRG

October 2010

Sprint vs. Verizon
4G roll-out

SMITH-TRG

October 2010

MARKET POSITIONING

STRATEGIC vs. TACTICAL vs. SURVIVAL

SMITH-TRG

October 2010

“The greatest value creation opportunity
will fall to those who give the end-user
consumer what they want…really, really
want. And that is: an integrated, easy to
use, video media experience, anytime,
anywhere, and on any platform.”
- Richard D. Smith, SMITH-TRG
Author, AD-MIRED, 2006 book

SMITH-TRG


Here come

MORE
HANDSETS
October 2010

SMITH-TRG

October 2010

Smartphones
global sales to hit 563.8 million in 2012
Source: Gartner

SMITH-TRG

October 2010

SMITH-TRG

Phone Wars
heating up

SMITH-TRG

October 2010

Android - iPhone
Android U.S. subscribers 10.9 million
in August, from 866,000 in 2009
iPhone U. S. subscribers 13.5 million
in August, up from 7.8 million 2009

SMITH-TRG

October 2010

FACEBOOK

Facebook is working with mobile-
handset manufacturer INQ Mobile
on two Smartphones slated to run
. Google’s Android operating system.

The devices, featuring Facebook About a fourth of Facebook's 500
social-networking services, are due million users log on to Facebook
in Europe first half of 2011 and U.S. from wireless devices.
in the second half via AT&T.

SMITH-TRG

October 2010

MICROSOFT

On Oct. 11, 2010 Microsoft and its
partners to announce initial wave of
handsets that will use Windows
. Phone 7, a thoroughly overhauled
version of the company's cellphone
operating system.

Mr. Ballmer believes the software
will compete more effectively Can Microsoft become relevant in a
against Apple’s iPhone and market increasingly dominated by Apple,
Google’s Android operating system. Google and Research In Motion?
SMITH-TRG

October 2010

METRO PCS

Launched nation’s first Long Term
Evolution (LTE) 4G wireless
broadband network in Las Vegas
. with the first-ever commercial LTE
handset: the Samsung Craft.
By 2011, the company expects to
Like all MetroPCS services, the cover 19 markets with the LTE
new service is prepaid and it service, according to Tom Keys,
doesn't require a contract. MetroPCS chief operating officer.

SMITH-TRG

October 2010

T-MOBILE

High Speed Packet Access,
HSPA+ is T-Mobile’s emerging
high-speed fourth-generation, or
. 4G, wireless phone network. LTE
(Long Term Evolution) is a 4G
technology backed by Verizon
Wireless and AT&T. Unveiled T-Mobile G2 smartphone
handset with Google Android.

SMITH-TRG


Here come

MORE
TABLETS
October 2010

SMITH-TRG

October 2010

"Everyone is trying to figure out the opportunity
for these types of devices, how to position media
tablets in a way that they don't cannibalize other
businesses”.
Source: Richard Shim, Director,
IDC’s personal computing program

SMITH-TRG

October 2010

2010 tablet market
.
11 million units
Source: ABI Research

SMITH-TRG

October 2010

SAMSUNG

Samsung introduces Galaxy Tab

.
TOSHIBA

Toshiba introduces Android based
Folio 100

SMITH-TRG

October 2010

RIM

The Black Pad, Playbook. It will
have Bluetooth, front & rear facing
cameras for teleconferencing, and
. broadband connections but will only
be able to connect to cellular
networks through a BlackBerry Principal market is busy working
smartphone. people. Initial target customers –
50 million current RIM subscribers.
Since the tablet won't be sold with a
cellular service, it's not clear which
carriers/retailers will sell the device.
SMITH-TRG

October 2010

IBM Survey
2000 IT professionals in 87 countries
91% say, cloud computing overtakes on-premise in 5 yrs.
mobile computing #1 IT opportunity in 2011

SMITH-TRG

October 2010

Content &
Services
Apps in future will generate recurring
revenue, like subscriptions vs.
one-time payment

SMITH-TRG

October 2010

APPLE
APPS STORE
net revenue to rise…
$425 million/fiscal 2010
to
$2.3 billion/fiscal 2015

SMITH-TRG

October 2010

iFund
$200 million investment capital fund
devoted to iPhone, iPod Touch and
iPad apps

SMITH-TRG

October 2010

OPPORTUNITY TROUGH

it’s all about advertising dollars . . .

SMITH-TRG

October 2010

“Major broadcasters, movie studios, retailers,
and content aggregators are all experimenting
with new ways to distribute video content
online and attach advertising to their offerings.”
- Kurk Scherf, Principal Analyst
Park Associates

SMITH-TRG

October 2010

Internet Video Revenues

Revenues
To
Exceed
$7 Billion
In
2010

SMITH-TRG

October 2010

Google Revenue by Source

Total
Ad
Revenues
Nearly
$18 Billion
2009

SMITH-TRG


WHY?
handsets & tablets
October 2010

SMITH-TRG

October 2010

Mobile Ad Revenues

Revenues
To
Exceed
$3 Billion
In
2013

SMITH-TRG

October 2010

Apple Threatens Search
Giants' Mobile Ad Shares
Google, Microsoft, and Yahoo! have swiftly lost share in
the U.S. mobile advertising market to Apple's new iAd.
Independent rivals such as Jumptap and Millennial
Media are gaining, too.

SMITH-TRG

October 2010

Apple 21% of Market
Google's share will drop from 27 percent to 21
when combined with results from AdMob, the
ad network it bought in May
Microsoft will drop from 10 percent to 7
Source: IDC

SMITH-TRG

October 2010

Worldwide Ad Requests

Global
High
Growth
Trend

SMITH-TRG

October 2010

Cost-Per-Action (CPA) Ads

OfferMobi
Opening
The
Age of
Profitable
Mobile
Marketing

SMITH-TRG


AND
the big one . . .
October 2010

SMITH-TRG

October 2010

BATTLE
for control of living room TV
(entertainment platform)

SMITH-TRG

October 2010

The one advantage pay-television providers have
left is large amounts of new content to provide to
a television hungry populace.

SMITH-TRG

October 2010

Ad Spending for Tech Co’s

Apple
Spends
Half
As Much
As
Microsoft

SMITH-TRG

October 2010

Unfortunately for satellite, cable, and fiber optics
providers the networks first cracks are starting to
appear in the solidarity between pay providers
and content providers.

SMITH-TRG

October 2010

VALUE
no future without sustainable value creation

SMITH-TRG

October 2010

Netflix - A Value Creation Move . . .
Netflix buys rights to stream films from three studios
making it the first true Web-based movie channel.

SMITH-TRG

October 2010

Netflix has 15 million subscribers and ad-hoc
distribution network that includes Web-ready TVs like
Sony's Bravia, game consoles like Microsoft's Xbox
360, and even gadgets like Apple's iPad.

SMITH-TRG

October 2010

Apple to Use Netflix –
Stream Movies
How? Through Apple TV device as well as the iPhone
and iPad. Since announcement, Netflix' shares have
jumped 14 percent to about $143 a share.

SMITH-TRG

October 2010

Apple

Introduces Updated
Apple TV
Connects to a high-definition television - can show rented
movies and TV shows from Apple's own service, plus content
from Netflix, photos on Flickr, YouTube clips and more.

SMITH-TRG

October 2010

Interactive TV Arrives?

Audio Cues Trigger Poll Questions and More

ABC's new iPad app for the upcoming show "My
Generation" delivers poll questions, trivia and other
elements in sync with each episode as it unfolds. It's
a new stab at interactive television, using a second
screen -- the iPad's -- instead of taking up real estate
on the TV screen you're trying to watch.

SMITH-TRG

October 2010

Apple

ABN and Fox agree to provide their
network content to Apple TV.

If this trend continues (and it is pretty
hard to hold the line against technological
trends and public preference for choice)
there will be very little left to favor
pay-tv versus on demand web
provided programming.

SMITH-TRG

October 2010

Google

Launched
Google TV

Google angles to become a bigger player in the living room with a
technology called Google TV, based on its Android software for
cellphones, that will let viewers search for Web video and run
Internet apps alongside TV programs.

SMITH-TRG

October 2010

Disruptive Innovation

Greatest
Potential
for
Value-
Chain
IMPACT

SMITH-TRG

October 2010

Googleopoly

Federal Communications Commission
is opening up unused airwaves
between television channels for
wireless broadband networks.

More powerful and can reach
farther than today's Wi-Fi hotspots.

SMITH-TRG

October 2010

EVOLVING MARKETS

WHAT’s NEXT?

SMITH-TRG

October 2010

Flex Displays

work like computer screens but
with a literal twist—they can
be bent, rolled and folded like
a sheet of paper

Imagine e-readers or tablet
computers, that aren't heavy

SMITH-TRG

October 2010

Digital

Dashboards
going to the next level . . .
four wheeled media platforms

SMITH-TRG


AND MORE . . .
October 2010

SMITH-TRG

October 2010

WHO WE ARE begins
with WHO WE WERE.

A digital-media venture development and value
creation consulting firm.

Launched second venture as technology sector
imploded, drastically changing the playing field.

Many packed it in. Others didn’t have the vision,
passion or ‘Attention Economy’ experience.

We did. And, we embraced it.

Our consulting, IT/telecom & digital-media roots
uniquely enable us to assist carrier and media
industry/sector/segment CXO’s develop and
execute business value creation strategies .
Richard D. Smith, President
As you can tell, our past has a great deal to do
RDSmith@SMITH-TRG.com
with our present.

As well as our future.
SMITH-TRG


Thank you.

www.SMITH-TRG.com
October 2010

iPopped, Media C-Suite Strategies, by Richard D. Smith, CEO, SMITH-TRG

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